Where are they going to go? (Massive company lay-offs)

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I was just thinking about the last 2 days as to Lucent Tech. laying off 20,000 and now today HP announce 6,000 and then couple these with the already thousands that have been lay-off from others places,etc. this past year. Now,I know that these will take place over a certain time period but the question still remains. Where are all these people going to go? The Tech industry ain't going to hire them anymore. Not much hiring if any going on with the auto plants. There are just so many Mcdonald's,Wal-Mart's,Home Depots,etc. to work at. And then in a few months fall and winter will be here and then you'll have slow down's and lay-offs in the outdoor service businesses,and yet people are still buying and buying. By us in Ann Arbor they are building 12 con-do's in the downtown area priced from $690,000 to $1,250,000 plus they are building 8 more as part of a affordable housing condition with the city and they are priced at $96,000. They're not even built yet, and they have a waiting list for all 20 of them!!!!!! Wheres it all coming from? are we heading for a melt down here?

-- TomK (tjk@cac.net), July 26, 2001

Answers

In my opinion, there are two economies operating in this country. One is the economy of those who are able to buy those condos, new vehicle ever couple of years, stock market, etc. The other economy is the economy of those who are getting laid off, work at Wal-Mart, live in modest homes and drive vehicles that are a few to several years old. The reasons for this are many and complicated (boy, don't you miss The Intentional Peasant?) and I"m not an economist. I am a small business owner and I see the two economies very clearly.

-- HannahMariaHolly (hannahholly@hotmail.com), July 26, 2001.

My wife and I ask the same question about how do folks live in these $300K+ houses. We live near several gated communities that start at $500k and have $2000 a MONTH fees - for the golf course & country club of course.
What jobs do the folks have that pay that enough to handle the mortgages. That 690K house with 600k financed @ 7% 30yrs = 3991 a month. [used an online mortgage calculator, every bank has them] {use 0.006652 times the financed amount, for the monthly payment}
That means you need 47K NET income to pay just the house alone, and when you have a 690K house you have lots of toys and other expenses, to look good with the neighbors. So, yes that would be doable on a 150K income, but tight. Now where do you find those incomes? They are fading fast.
Grass Roots Info center: the lay off archives This is another forum run on this server.

-- (perry@ofuzzy1.com), July 26, 2001.

oops meant $200K income, but still very tight.

-- (perry@ofuzzy1.com), July 26, 2001.

I will agree about the 2 economies on the basis of working at a storage facility.

We've got people who have rented storage rooms here for over 6 years, some of them with the largest and renting more than one unit to boot! They don't even blink when it comes time to pay the rent or the late fees when they forget because they were out of the country.

Then we've got the people who are buying new homes in the hundreds of thousands of dollar range. No blinking there either.

Then we've got these very poor people who are scraping together trying to keep their stuff in the cheapest unit we have and are having a hard time paying that every month, but they don't have a choice, they got evicted, or whatever.

There doesn't seem to be a middle anymore. It is the very wealthy or the very poor.

Now what really concerns me is that most wealthy people today are highly invested in the stock market. YIPES!!

Where are all of those wealthy people gonna go if it crashes?

My perception...poor people will have it on them hands down because they haven't had all of the luxuries and they know how to do things the old fashioned way. There are people I've met in my travels that don't even know how to cook because they haven't had to.

The great recession caused a rift in the wealth of this country. Those that lost their jobs and everything else because of the massive layoffs and computer technology, well...it took them ten years to actually start making the same money they did 10 years prior, so they are still 10 years behind in the game.

We have one more, and there won't be anybody to bale them out of trouble, there won't be any 'new' job scene to retrain for. I do believe, and I told my husband this, if we don't buy our peice of land pretty soon, we will never be able to.

I talked to our realtor the other day. He said, I don't know what in the world is going on but it just seems like everybody and his brother has started buying up land....

Those who have a little money set aside and see the real economy for what it is are going to buy while they are able to and insure it to the hilt.

That's my two cents worth.

-- Stephanie Nosacek (popossum@earthlink.net), July 26, 2001.


As I sat here reading, my tv news beside me reported JD Uniphase is cutting 16,000 jobs. I think their earnings were out today. Sad that this "paralell" economy is imploding, but as "they" were saying a long time ago, it's a "new" economy, and I guess it's still finding it's place and value. What "they" didn't talk about was the human misery that would accompany the bumps. Let's hope lots of these "new economy" workers are single young 'uns that can easily slip back into Mommy and Daddy's empty nest to recuperate. Too bad it has to trickle down...hopefully not to Mommy and Daddy's nest.

My "poor" husband has been working overtime for the last 2 years since he took his current job, and starts his first vacation tomorrow. He's a cabinet/furniture maker. His boss worked out of his home garage when my husband started there, til he could afford to build his shop. They even had to move machinery around depending on what machine needed to be used (and woodworking equip. is HEAVY). DH is his only employee, he does nothing on credit, and on occasion we have to wait a few days past payday for the cheque. But at least I know his boss isn't over-extended in the credit department, and at risk of bankruptcy. There's job security. If they have to cut back hours, maybe my husband will work only 40 a week, instead of 50 or 60. Despite all the extra money, we haven't saved. But we've paid off debt, and made major purchases like major appliances we needed, kids' beds, and purchased things we didn't have. Like life insurance, lawyers fees for wills, etc. If we are melting down, we chuck the inexpensive rented house, and owe nothing to no one. Tent on our property from May to November, December to April with family. We're fortunate...they're nuts. Sheesh...I'd never spend more than 50,000 Cdn$ (about 35,000 US$) building our future house. What a waste, excessively inflated prices for (probably) slapped up buildings. Where's the reality?

-- Rheba (rhebabeall@hotmail.com), July 27, 2001.



There is no reality! This 'new economy' was brought around by a 'new age' with a 'new religion'.

It's called in most circles, creative visualization (If you can picture it in your mind you can have it). Not reality based at all. I was taught that if you worked for it, and you were willing to pay the price you could have it.

But, can't blame the new agers totally on this because it's even infected religious circles, they have the 'name it and claim it' theology. They think they are little gods running around all over the place and they can create their own destinies.

Of course they also have all kinds of purple and pink little pills for those who go out on a limb with shirley mcclain and fall off.

Don't you know that it's almost a crime in the public sector to say anything realistic, especially if it's viewed as being negative (reality).

I used to joke that my mother was neurotic and my stepfather was psychotic, He built sandcastles in the sky and she moved into them.

Sadly, I know a lot of people like that. One third of them are in office and are getting paid with our tax dollars, the other 1/3 are in charge of teaching our kids. The final one third are probably those idiots who laid off half of the workers (downsizing) and thought that they should be able to get twice as much work done with half the pay and half the employees.

-- stephanie nosacek (pospossum@earthlink.net), July 27, 2001.


My husband works for Lucent, we don't know if he will have a job tomorrow, but we know that sometimes the worst things can be the best things.

-- Trendle ellwood (trendlespin@msn.com), July 27, 2001.

I worked for AT&T from divesture till the spilt out lucent. At the end it was tough. Everytime MCI came out with a new AD on TV I had to wonder if that ment someone was going to be layed off. Now I do have to admit, both lucent and AT&T have have some nice packages for employees who left. At AT&T it use to be customer first, employee second, stocksholders 3rd. Now its stockholders first and nothing else.

The new economy is based not on making a profit, but squeezing the most profit out of a company with little regard anything. People are expendable, dump them when you dont need. them. Its sad to say.

They days of working for a company all your life for a good wage is gone unless you own the company. Greed and profit is the name of the game.

When it comes to affording the $500Kplus houses. You find even those living in them cant afford them. Its taking 2 highly paid people just to keep up an image. In the US we spend money that we dont have to impress people we dont like!!!!!!

-- Gary (gws@redbird.net), July 27, 2001.


I liked that last sentence you wrote Gary. . . very descriptive of the situation. And I hope that Trendle's husband continues to receive good news.

The 'new economy' sure sounds a lot like the 'old economy'; the people who can least afford layoffs seem to be the ones who get them. It is getting to the place that having backup skills like welding, auto repair, appliance repair, and plumbing skills (aka handyman skills) is a NECESSITY for those times whose career has become sidetracked for a bit. A job that will pay the basics until their careers can be resumed. It is scary for those of us who already have the necessary survival skills for low income times; I feel bad for the ones who are up to their necks in debt and will really take a major hit during a layoff. When my brother-in-law was laid off five years ago, they had to claim bankruptcy and lost a lot of things, not including their credit. He has bounced back, but is falling back on old habits; spending money when he should be saving it.

This has become our attitude; to take for granted that everything will continue to grow and expand, only to find out differently. And we are not ready for this, especially the younger people in the 20's. They don't remember the recession during the early '80's or '90's. We have had 10 years of an economy that has been up up up. We are a little spoiled by this unprecedented economic growth.

But in some of these cases, aren't these people bringing this upon themselves? I mean people who really make an effort to go out and spend all their income on toys they don't even really use, come on folks. What has happened with the notion of saving during the good times for the inevitable bad times (what goes up . . . must come down).

A meltdown? I think more of an attitude adjustment will be realized. People coming down back to earth with what they need. I just hope we learn our lesson.

-- j.r. guerra (jrguerra@boultinghousesimpson.com), July 27, 2001.


There's a melt down coming alright. May not be tomarrow or the next day or even a year or two from now, but you can bet it is coming. Look at the average debt people are carrying -- $250,000!! That is for thier house, cars, and credit cards. Average person now carries approximately $7,000 - $12,000 in credit card debt alone. How many people do you know that is completely out of debt and owe nothing to no one?? I think I know of one. It all has to come crashing down at some point. As a bankruptcy paralegal, I see it all the time and it is growing worst. In the Tampa divison of the federal bankrutpcy court alone, there has been over 15,000 bankruptcy filings so far this year! And that is only in Tampa...we have 4 other bankruptcy courts in Florida.

-- Karen (db0421@yahoo.com), July 27, 2001.


We don''t have any debt load, we pay our cards off at the end of the month. We have charge accounts at 2 hardware/lumber yard stores, those bills are paid each month as well as the bill from the farm Co- oP. We just sold our farm for $300+K and are buying a smaller but newer house on 10 acres for cash. I have a 97 pickup and my has a 98 Escourt wagon, they are free & clear, we have a new Lance camper, paid cash for that. With selling the farm, all my meger equipment has to be sold, my tractor books for $18,000, the rest of the iron is worth about 15K. If we see a crash we will not go hungry but certainly have to tighten our belts. The folks buying our place are paying cash without even selling their place in town. The brought out a brand-new Husquavarna 17 HP riding mower with a tripple bagger, I nearly blew out a disk unloading it off their new Toyota Tundra, I don't think they are too worried about a melt down either. If you don't have anything to start with you won't have anything to loose. I lived in Flint Michgan back in the 50s when nearly all the auto plants shut down and there were soup kitchens down in the industrial areas of town. I had a pickup reposessed in the recession of the early 70's when unemployment in my area of NY was 25% we made it through and recovered. The recent decline of the stock market has hurt us greatly but it will come back, as it always has, like life were are in for the long term.

-- hendo (redgate@echoweb.net), July 27, 2001.

Buy and hold, hold through the dips may have worked in the past but I wouldn't be so confident it'll continue. Most people involve emotions in investing and treat it as a game of win or lose. They'll ride a loss down to help live in denial of making a bad investment. If anyone here is investing, please consider the value of stop-loss management and get out if your investment has gone down 10-15%, you can always get back in. There's little to justify holding a loss and overall, a good loss management approach will pay off big in the end. Quite alot of the stock market won't be coming back. The nasdaq is down 60% from a year and a half ago and no turnaround is in sight. Quite a few tech stocks that were trading in the 100s last year and now going for a few dollars will never come back. I can name dozens of tech stocks, even well known companies whose stocks are trading down 90% or more from a bit over a year ago. Even the big name tech stocks likely won't see those highs for another 20 years or more, if ever. People got spoiled in the market the last 15 years. Most of the bagholders live in denial now, looking back at the past and convincing themselves their stocks down 50% or more will come back. As they say, past performance doesn't guarantee future gains. The last 15 years was an anomoly brought on by massive liquidity the Fed pumped into the market. All this money laying around with nowhere to go until the internet revolution came about. In the end, what's happened will be known as the greatest transfer of wealth ever. The same big house firms telling investors to relax and wait are busy dumping everything they hold. The Japan nikkei index just hit a 16 year low this week. Our nasdaq has correlated close with the nk. There's little to say the US won't follow the same path. Here's a good example of the nature of market bubbles and how close our current market is correlating with the nk bubble, gold bubble of the early 80s, and the djia crash in '29/30. http://www.vtoreport.com/nasdaq/nasdaq-nikkei.htm Since the 70s we've moved towards a 'two-tier' labor market. Since 1975, almost all gains in household income have gone to the top 20% of households. People making minimum wage or a few dollars more can't afford to live in most areas. There isn't much of a middle class anymore and because of tax credits and other government programs many people make out better staying in the low end of income levels rather than trying to be in fast evaporating middle class. The area I live in now, starter homes if you can find them are priced at 140k and up. That's out of the reach of most low income people, and 140k won't get you much. They're building homes at a blistering rate here but most are in the 300-500k range. Affordable housing is mostly being ignored. In some areas I've seen 2 bedroom 1000sq foot 30 year old houses going for 250k+. A few months ago there was 2 acres of raw land near Irvine, CA they were asking $40mil for. This was just a few acres on a former ranch with a scenic view. I guess I could see 2 acres in the middle of NYC or LA being worth this parcel was just pure insanity. Haven't checked to see if it was bought but I'm betting it was, probably by one of the lucky ones who profitted from the tech boom and got out while it was good.

-- somebody (something@somewhere.com), July 27, 2001.

I sure don't know where they're going to go, and I pray they'll be ok, but a lot of people are in for some hard times if you ask me. So many young people today can't even cook or do laundry, much less possess some sort of "blue collar" skill that might be useful to them or anybody else.

Like it was said before, there are only so many Wally World and Micky D's type of jobs out there, and at minimum wage, there isn't going to be a lot of free cash after buying the necessities.

Personally, I'm thankful my job has lasted as long as it has, but I can see it disappearing due to downsizing or cost cutting measures (my company just announced that after 6 months of cost containment measures, the MAX raise this fiscal year will be 3%, which means that 1~2% will be the norm if lucky). So I plan to be debt free by the end of the year. I won't have as much saved as I would like, but I won't have anything hanging over my head either.

-- Eric in TN (eric_m_stone@yahoo.com), July 27, 2001.


If America's lucky, those people will go...here. Let's hope that they take those nice "see ya" packages (or even the not so nice ones) and finally realize that the biggest problem with life in the fast lane is that you get to the end of the road so quickly. If they were all to move to the country (or even just within sight off the sidewalks), set up even semi-sufficient lifestyles, reduce their debt (because you never know when it'll happen again, honey), and start taking an interest in running their own "home as a business" lives, then we would all see some major changes, many of them for the better.

Would it mean more neighbors? Yeah, but we all gotta compromise if we want a better futre. The whole point is that the lay-offs lay off a LOT of people. If even a decent handful of each series of lay-offs started following our path, then eventually we the homesteading people would slowly start building a meaningfully larger voting base, which would in turn mean better laws for us (and presumably for the country itself), and a better and more effective lobbying force against bad laws.

If you don't believe me, just look at the whole organic food laws that were passed in the past few years. Perfect? Hell no, but at least they're a start, and its a type of thing that if you told someone years ago that enough people would care about it to make it a law (not to mention the HUGE mobilization of protest that headed off a wide chunk of industry self-interest in the form of allowing things like irradiation and sludge fertilizer to be labeled organic), folks would have laughed in your face. Yet here we are, with a fairly reasonable (for a first attempt) organic labelling law. Ten years ago, you couldn't even find organic stuff unless you went to the health food store, and sometimes even then it was hit and miss. Now I can go down to the local Feed Yer Face supermart and find not only organic foods, but bulk foods as well.

So here's hoping that a reasonable chunk of people sick from their slice of American Pie will decide to "immigrate" beyond the sidewalks. Welcome them when they come, weed out the posers and the wannabes that only wanna look, band together to fight "gentrified country" zoning laws that try to sterilize the countryside for the edification of the new yuppie landed nobility, and realize that with every newbie fed up with being dangled by a very thin string held by very fickle management we are all coming closer to a self-sufficient country full of hard-working and "enough" thinking people.

You make think that I am completely full of s**t, but that just means that I have no room to take any more!

-- Soni (thomkilroy@hotmail.com), July 27, 2001.


To the unemployment lines. Look at history and the recessions and depressions and our current evening news for predictions. The recession / depression of the early 90s was cured with PCs and internet as the boom. This one will probally be cured with genetic engineering , medical and cloning and of course a massive political upheaval in the next six to ten years. Possibly a military action will be a rebuild catalyst also.

-- Jay Blair in N. AL (jayblair678@yahoo.com), July 27, 2001.


Jay, I think you hit it on the head with that thought about military action. If this econimic slump doesnt turn around soon, the President is not going to be as popular as he is currently. One thing that George Jr probably learned from his Dad's presidency, if things are not going too well, a war makes you popular. There certainly is enough going on in the Middle East and in the related oil situation to warrant military action in certain people's eyes. Just let it heat up a little further and it wouldnt take much to rally the country behind a US involvement.

-- daffodyllady (daffodyllady@yahoo.com), July 28, 2001.

Jay, Ah Yes!!!!! If it's one thing the money changers of the world can count on to get everything back on track its WAR!!! I just hope that if we do we actually win something this time around instead of wasting a bunch of bullets and lives. But then again this time around could be are last time around,with China,and EU,out there.

-- TomK (tjk@cac.net), July 28, 2001.

I recall seeing an item on the news regarding the Gulf situation just last week. Yesterday, I was discussing this thread with co-workers and an additional possibility was mentioned in our conversation. Alternative energy source production could possibly become a potential economic boom market that could employ many and avoid the more unpleasant possibilities.

-- Jay Blair in N. AL (jayblair678@yahoo.com), July 28, 2001.

Guess it's time to re-read that copy of "Report from Iron Mountain".

-- Don Armstrong (darmst@yahoo.com.au), July 28, 2001.

I've never been much of a doom and gloom person - always seeing disaster around the corner, but I'm not blind either. I don't see how things can continue without a collision of some sort. It feels like a circle turning back on itself to me or a large crowd stampeding with no idea of a destination or their safety on the way. I guess I have grown more prudent and less trusting. I know my family has only me to rely on and I better be up to the job. I work in public safety so I have some job security in case of recession or worse. But what if.... My mother recently moved in with me - she requires a lot of care. I know my son can take care of himself, but Mama is my responsiblity now. She grew up in the depression and she has so much to teach me - every day is a lesson of some kind. Knowledge I was searching for in books and magazines and forums is now as close as my kitchen table. She has taught me there is nothing wrong with being ready and able - it doesn't mean you are looking for trouble, just means it won't surprise you.

-- Linda Al-Sangar (alsangal@brentwood-tn.org), July 29, 2001.

I think I'm going to read "Farmer in the Sky" again.

-- Jay Blair in N. AL (jayblair678@yahoo.com), July 30, 2001.

The lady is correct -- there are two economies, and the gap between them is growing. To learn more about the working poor, those dwelling on our economy's bottom, I suggest "Nickel and Dimed" by Barbara Ehrenreich. Was a real eye-opener for us.

-- Sally Rogers (saltex@pdq.net), July 31, 2001.

My husband works for Lucent Technologies, so we are just bidding our time right now hoping things will turn around, in the meantime we are saving, saving, saving and looking for other jobs. It is a little scary because we just had our first child, so the worst part would be loosing our insurance.

-- Ginger (majic99@home.com), July 31, 2001.

It's now just the large companies. Seems like every day the Nashville paper has an article about this or that company closing a small plant or laying off a couple of hundred people. A saying, with probably a lot of truth to it, is a bunch of people are only two missed paychecks from a bankruptcy situation.

-- Ken S. in WC TN (scharabo@aol.com), July 31, 2001.

Ken, you are probably right. And suddenly, they go from being middle- class, accepted memebers of our society, to someone with a deep, dark secret that they cant tell anyone. Remember the recent thread on bankruptcy on here? I feel so badly for that lady. She obviously was trying to figure out how best to deal with an inevitable bankruptcy. But the responses from the rank and file of us in here told her loud and clear not to tell anyone her dirty secret again!

I just think its pitiful the shape most of America is in financially.

-- daffodyllady (daffodyllady@yahoo.com), July 31, 2001.


It seemed to me that the rank and file was saying try a bit harder before you run for the easy way out. Bankruptcy has a place of course. I can completely understand if someone becomes ill and suddenly has 50k or more in medical bills but for 2 adults, neither working who are in debt less than a years wages I think it's just a matter of taking the easy way out and putting your mistakes on others. 9 out of 10 people I know who claimed bk could have paid their debts if they wanted to. Half of those people went right back to getting themselves into debt again too, why wouldn't they? They learned how easy it is to create a bunch of debt and not be held responsible for it.

-- somebody (something@somewhere.com), July 31, 2001.

I follow the stock market and can hardly recall one day since January that a tech company hasn't announced layoffs. Some of them were 1000's of people getting laid off. The momentum of that doesn't seem to be letting up either. It's moving into non-tech industry too and the whole world economy in general looks like it's gonna get worse before a turnaround can happen. The fed rate cuts haven't helped at all yet. Home sales are still going strong in some areas though, about the only strength hanging on for now.

-- somebody (something@somewhere.com), July 31, 2001.

I was just as mystified as the rest of you when it came to explaining the growth in upscale living quarters in our area at a time when it seemed that everyone was getting laid off. Quite by accident, I found the answer while doing some research at the local property appraiser's office. About 80% of the luxury homes were owned by county, state and federal employees. No, not the guy driving the bus or the clerk behind the desk at the license bureau, but the department manager, personnel supervisor or USDA field boss. Our county manager makes $130K plus car and other bennies. The supt. of schools makes $180 plus. We have an entire floor of the local county admin. bldg. full of $80K+ employees. They don't worry about layoffs, economic downturns or where their next raise is coming from. Think I'm wrong? Check out the paychecks of your local govt. managers and see how many of them there are. You ain't gonna' believe it!

-- John James (jjames@n-jcenter.com), July 31, 2001.

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